While most conversations around gender equality understandably focus on the social and health benefits of greater inclusiveness, relatively less time has been dedicated to the important question of the critical role that women—as customers, employees, executives and entrepreneurs—are currently playing in transforming the global economy. An avalanche of data and statistics support the view that women today are the strongest drivers of economic growth worldwide. For this reason, The Next Billion: Women & the Economy of the Future launch conference examined increasing women’s participation in the economy as a business case first, and a women’s case second.
Senior-level corporate leaders from throughout Canada, the United States, Europe and Latin America came together at the inaugural Next Billion Conference in Vancouver, Canada, to share the practical experiences of some of the world’s largest companies which are moving beyond rhetoric and recognizing the link between the economic engagement of women and the bottom line. This innovative conference was launched by Women and the Economy Ltd., in partnership with Business for Social Responsibility (BSR), the European Bank of Reconstruction and Development, the Inter-American Development Bank, the Multilateral Investment Fund, UN Foundation and the World Bank Group led by the International Finance Corporation.
This successful first Next Billion Conference provided key insights into how international companies such as IBM, Unilever, Li & Fung, HP, Accenture, Disney ABC and Edelman Canada are capitalizing on the potential of the next billion women and using the data to inform their day-to-day business operations and to ensure their long-term profitability have created specific financial services and instruments that women business owners need; these institutions are ahead of the curve in attracting and retaining women customers and thus ensuring their long-term profitability. We highlight several key themes presented at the conference by the Keynote speaker, Nouriel Roubini, Co-Founder and Chairman, Roubini Global Economics, and panel members. and growth. Financial institutions like Itaú Unibanco and Inter-American Development Bank.
1.1 Women’s participation breeds social and economic growth
- Women today are being viewed as the fastest driver of economic growth worldwide. Economist, Nouriel Roubini, explained that a greater labour supply of women would mean greater output and production of goods and services.
- Capitalizing on women’s participation in the workforce would translate into productivity growth in advanced economies and emerging markets as well.
- On the demand side, Roubini described a context in which women would have more disposable income that could be used for consumption, savings, and investments in the education and healthcare of their own children, thus enhancing education and healthcare further and creating economic opportunities for everybody.
- Capitalizing on the next billion women would have both an economic and social impact and would lead to higher overall pay and gender equality, and more cohesive and inclusive societies.
Example: In Latin America, Itaú Unibanco took a strong market leadership position by declaring its intention to target services for women-owned businesses, which now represent almost 50% of the bank’s portfolio.
1.2 Women’s participation boosts companies’ performance
- Research and data presented at the conference demonstrates that closing the gender gap at the executive level represents a huge area of opportunity.
- According to a McKenzie Study in 2013, the top quartile of North American companies with women on their boards outperformed the average companies by 46% on return on equity.
1.3 Partnerships are key to accelerate collaboration as an ecosystem
- Collaboration between government and the private sector is key.
- Partnerships are essential to mainstream women into politics, and corporate leadership.
- Partnerships create and support the ecosystem that provides the bundled sets of high-value financial and non-financial products women need.
- Partnerships allow organizations to call on investors in unique ways, as in the 10,000 Women Program launched in 2014, a $600 million partnership between International Finance Corporation and the
Goldman Sachs Foundation.
1.4 Networks, sponsors and mentors are key to women’s scalable success
- Nouriel Roubini, noted that mentoring and training are key to the success of women and to supporting them to break the glass ceiling.
- Women’s success as leaders in business organizations is fuelled by developing initiatives and programs to nurture, mentor, sponsor and retain highly qualified women.
- Mentoring and training programs fill the “missing middle” and support women entrepreneurs to move from working in their business to working on their business.
Example: Instead of imposing quotas, the United Kingdom focused on collaborative and concerted business-led efforts and launched The 30% Club in 2010. Private sector companies came together with entities within the public sector and set a soft quota of 30% women on FTSE-100 boards by end 2015.
The UK started with 12.6% women on boards in 2010, is currently at 23.5% and hopes to make it to 30% by next year.
Example: Canadian mining company Goldcorp is changing its exclusive board policy and promotes a culture of sharing by encouraging and sponsoring its women executives to be placed on other boards, so that they can gain experience and skills.
Example: IBM has a culture of celebration – a program where young women are becoming celebrities within the company, with women like Amy Su and Lisa Seacat Deluca sponsored by the top management to become thought leaders in the field of big data and analytics.
Example: In 2008, for example, evidence showed that the more women there were in a company’s management, the less the share price fell, while in Latin America companies that have women on their boards have a 40% higher return on equity and having at least one female director on the board reduces a company’s chances of bankruptcy by 20%.
- Business models based on relationships which engage and empower women in both financial and nonfinancial products create a new value proposition. 1.5 Communicating the business of investing in women owned businesses.
1.5 Communicating the business of investing in women owned businesses
- Investing in women entrepreneurs is a key source of economic growth; Economic impacts to a country are substantive when an investment is made in women –owned businesses.
- Communicating to financial institutions the business gains that come from investing is critical. As Alexandre Meira da Rosa (VP for Countries IDB) noted: “The IDB has one simple policy, to put the money in the hands of the women in the house.”
- To incentivize more banks to invest in women-owned businesses, financial institutions need to hear the specific impact of investments in women-operated Small and Medium Enterprise’s (SMEs) and need to recognize why “women are the lowest fruit to pick”.
1.6 Governments are key partners in accelerating the pace towards success
- In 90% of 143 countries surveyed, there is at least one discriminatory law which impedes women’s economic participation.
- Creating a platform for market-based incentives through government policies, such as tax breaks for training women for jobs normally performed by men, can play a critical role in enhancing women’s participation in the workforce.
- Governments need to support women to balance their personal life and career, through proactive diversity policies.
- Introducing regulated gender quotas would promote gender parity faster than voluntary targets.
1.7 Areas of opportunity and next steps to successfully change culture
- Rethink women’s education and create opportunities to learn new business and STEM skills. Redefine what a good board member means.
- Technology and innovation can transform women’s lives.
- Millennials will accelerate cultural change.
Example: The Inter-American Development Bank (IDB) recognized that women entrepreneurs are the biggest source of economic growth, and in 2012 launched the Women entrepreneurship Banking Initiative (weB), to provide incentives to banks and other financial intermediaries to test innovative, inclusive lending models for women-owned SMEs.
Example: Over the last two decades the Caribbean region has closed 70% of its gender gap, and is the only region in the world where women’s participation in the labour force has been growing steadily and has now reached 53%. This has been the result of government’s actions, like awarding companies tax breaks for training women for jobs normally performed by men, thus breaking the strong occupational bias in Latin America.
Example: In 2012 Disney launched The Women’s Initiative, a program led by women that included men as well, which has sparked dialogue and generated opportunities for employees to think about gender balance in a very unique way.
As Mr. Roubini explained, by creating equal economic opportunities for everyone and increasing women’s participation in the workforce, we are actually ensuring overall pay and gender equality, thus creating
more cohesive, inclusive societies, and lasting cultural change.